TelOne is one of 35 state enterprises that the Government announced in April would be either sold off, partially privatised or allowed to shut down, as part of reforms meant to plug losses from parastatals. TelOne is to be partially sold off.

“The Government of Zimbabwe designated Tel-One (Private) Limited as one of the public entities to undergo partial privatisation through partnering of private sector investors that would bring in fresh capital injection as well as access to new technology. In order to implement the process of partial privatization, Transactional Advisors are hereby invited to express their interest for the provision of services on this proposed transaction,” TelOne said in a notice.

Government’s interests in telecoms are scattered across several companies, and it plans to sell-off stakes in the larger firms while merging smaller companies. Apart from TelOne, mobile operator NetOne is also up for partial privatisation. This means Government is seeking investors to take up some but not all the shareholding.

In 2016, the Government controversially acquired 60 percent of Telecel from Vimpelcom, now known as Veon, in a $40 million deal done via ZARnet, a dormant state-owned internet company that is itself being merged with ISPs PowerTel and Africom.

While Telecel was listed among the companies to be partially privatised, then ICT Minister, Supa Mandiwanzira, insisted that the Government in fact wanted to buy out the minorities and acquire 100 percent of the firm.

It is unclear how much of each telco the Government is willing to let go of. Government repealed the Indigenisation Act, which restricted foreign ownership to 49 percent. However, showing one of the many legal loose ends that still need to be tied up for investors, Section 36 of the Postal and Telecoms Act still bars foreigners from holding controlling stakes in telecoms firms.

TelOne, despite its legacy debts, is an attractive prospect for investors. The company has its roots in fixed telephony, but has been deliberately shifting focus towards broadband over the past decade as voice revenues plummet worldwide. Internet services accounted for 38 percent of TelOne revenues in 2017, the latest available figures, up from 29 percent in 2016.

TelOne’s blended average revenue per user (ARPU) – a measure of how much each customer spends on the network – is $27. However, for broadband alone, ARPU stands at $409.

TelOne is currently on a $98 million project, funded by the China Eximbank, to expand its broadband network.